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Joyce Clark Unfiltered

For "the rest of the story"

Disclaimer: The comments in this blog are my personal opinion and may or may not reflect an adopted position of the city of Glendale and its city council.

On November 21, 2023, at city council workshop, the long-awaited revised Economic Impact Study for VAI Resort and Mattel Adventure Park was released. The numbers are just astounding and are shared here.

The project has grown considerably since it was first envisioned and presented to the city. The Applied Economics Study presented this project description:

“The development includes 10 mixed-use buildings. Buildings 5 and 8 will open at the end of 2024 and the remainder of the development will open in summer 2025.

  • VAI Resort Hotel

    Building 1 will include a 299-room luxury hotel with 17,000 square feet of restaurants, 18,000 square feet of retail shops and 130 underground parking spaces.

  • Building 2 will include 29,500 square feet of retail and restaurants, a 9,000 square foot spa, a 155-room hotel and 230 underground parking spaces.
  • Building 3 is a parking structure with 3,900 spaces.
  • Building 4 will include 47,000 square feet of restaurants and themed retail, an aerophile balloon, a 3,000-seat theater, an 8,000 square foot Barbie theater and a 19,000 square foot Barbie Dream House attraction.
  • Building 5 will include a 9-acre Mattel Adventure Park with 250,000 square feet of indoor and outdoor rides and amusements and 8,000 square feet of themed restaurants.
  • Building 6 will include a 311-roon hotel, 28,000 square feet of retail and restaurants, an 8,500 square foot kid’s club and 150 underground parking spaces.
  • Building 7 will include 70,000 square feet of meeting and convention space, a 20,000 square foot night club, a 10,000 square foot fitness center and a 10,000 square foot swim up bar.
  • Building 8 will include 318 hotel rooms, including the Amphitheater Tower with 27,000 square feet of sky boxes overlooking the 90,000 square foot concert venue. This area also includes 37,000 square feet of restaurant space, a 4,500 square foot retail/café area and 390 underground parking spaces.
  • Building 9 represents Konos Island in the middle of the swimming area with 40,000 square feet of island beach amenities, 10,000 square feet of restaurant space, and the elevated Aerobar attraction.
  • Building 10 includes 55,000 square feet of corporate office space occupied by the developer/owner.
  • Other Amenities include the beach and pool decks, service areas, and 1,060 surface parking spaces.”

In summary and please note that my numbers are estimated based on available information, there will be on the site including both VAI and Mattel Adventure Park:

  • 1,013 hotel rooms available in a 5-building complex
  • 5,860 parking spaces on site including 900 underground; 3,900 in a parking garage; and 1,060 surface parking spaces.
  • 100,500 square feet of restaurants
  • 108,500 square feet of retail space
  • 387,500 square feet of attractions

It should be noted that that estimates of development costs and revenues earned are conservative as can be shown by a conservative estimate of 4 of the hotels’ occupancy rate of 42% to 46% and one hotel at an occupancy rate of 66%. Please note in the Westgate area, hotels are averaging a 70% occupancy rate.

In total, there will be 2,346,523 square feet of development at a cost of over $900,000,000 (nearly $1 billion dollars). The magnitude and complexity of this development should not be underestimated. It is not like building a one-themed development such as a single, large manufacturing facility or a hotel or a retail center. Rather, it is building all these combined and more at once.

The project site is forecast to earn $2.2 billion dollars in new sales, property and bed tax revenues to the city, schools, county and state over the next 25 years. How is Glendale incentivizing this $1 billion dollar project? It will waive permit and plan fee waivers of up to $1 million dollars and enter a Government Property Lease Excise Tax (GPLET) agreement on the entertainment, recreation, and concession portions of the development. In total, all fee waivers and the GPLET is $107.4 million dollars over 25 years in return for a 25 year income of $2.2 billion dollars.

How does the 25-year revenue break down? Starting in the year 2025 Glendale is estimated to receive annual tax revenue of $29,318,615 and to receive $40, 289,165 by year 2049. That means each year Glendale will receive $29 plus million dollars escalating to $40 million dollars a year by 2049. That is more revenue than that earned by the city from the Arrowhead/Bell Road corridor per year. These revenues go a long way in making up for the state-imposed loss of approximately an annual $14 million in rental tax that cities can no longer collect.

With the GPLET the County and Schools will receive $7,833,554 in year 2025 annually escalating to $18,972,199 by 2025. The State is estimated to receive $45,768,687 in year 2025 annually escalating to $50,980,151. The current and potential revenues to school and county districts are:

  • Pendergast Elementary School District currently receives $55,452 in tax revenue. Even with a GPLET it will receive $2,906,600 annually.
  • Tolleson Union School District currently receives $51,883 in tax revenue and with the GPLET will receive $2,719,506 annually.
  • WESTMEC currently receives $1,765 in tax revenue and with the GPLET will receive $92,498 annually.
  • Community Colleges currently receive $11,121 in tax revenue and with the GPLET will receive $582,938 annually.
  • All other taxing districts (county) currently receive $32,997 in tax revenue and with the GPLET will receive $1,734,838 annually.

These statistics should give you a sense of the magnitude of this development. This development will solidify Glendale as THE Entertainment and Sports destination not only in the state but nationally.

I am so pleased and excited about this development that I have arranged to do a half hour “Beyond the Headlines” on each component, VAI Resort and Mattel Adventure Park. Taping of the videos will occur in January 2024. Expect them to be on air toward the end of February 2024.

© Joyce Clark, 2023     

FAIR USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such material. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.

It has been 17 years and 210 days since the city’s pledge to build the West Branch Library.

Nearly all major battles we face seem to revolve around either love or money. In the case of the Coyotes vs. Glendale it’s definitely money. Before I post a blog on the current deal between these entities it’s important to understand the effects of the biggest driver — money.

Westgate and its sales tax revenue is an important component. It cannot be denied that the majority driver of retail sales tax revenue in Westgate comes from Tanger Outlets. Before Tanger’s opening in November of 2012 retail sales tax revenue was under a million dollars a year. Tanger, when it opened, was projected to earn $2M in sales tax revenue and in fact, from the start, has generated closer to the $2.5M mark.

As you can see from the chart below in calendar years 2013 and 2014 retail sales tax revenue was over $3.5M and almost all of it is attributable to Tanger. In October of 2014 Tanger expanded and the city can now expect an estimated $4.5M in retail sales tax revenue in 2015. Restaurant/Bar sales tax revenue has also increased over time and can be related to football games, hockey games and concerts held at the University of Phoenix Stadium and the Gila River Arena. This component is also attributable to the opening of new restaurants in Westgate. This sales tax revenue has grown as well and is estimated to earn some $3M. “Other” sales tax revenue is composed of bed tax, AZSTA stadium city sales tax, licenses & permits, etc. It is estimated to earn about $5M in 2015.

In 2015 estimated sales tax revenue from Westgate looks like this: Retail — $4 to $4.5M; Restaurant/Bar — $3 to $3.5M; and “Other” — $4.5 to $5M.

Westgate sales tax

The argument often used by Coyotes’ supporters is that the spillover effect from 42 nights of hockey games is essential to Westgate’s restaurants and bars survival and to the city. How much of that spillover is from 70,000 fans attending each of 10 football games? Admittedly it is substantial and could account for anywhere from 1/3 to ½ of the sales tax revenue generated from restaurants and bars annually.

The point is that Westgate has grown despite all of the drama and turmoil of the Coyotes and is strong enough to survive with or without them. If one looks at all of the factors that determine annual sales tax generation at Westgate the Coyotes (from hotel stays and restaurants/bars) are estimated at driving about $2M a year out of a total estimated annual sales tax revenue of a low of $11.5M to a high of $13M.

As long as we are on the subject of money there is another factor to consider. Many Coyotes fans are hoping that the Coyotes will move to downtown Phoenix or a new arena at Talking Stick. Dan Bickley in a recent July 26, 2015 Arizona Republic story entitled Coyotes not out of the woods – or Glendale – just yet said, Sarver says his Suns pay $23 million a year just to play at US Airways Center: $12 million in debt service, $8 million in arena management costs and $3 million in rent. A new arena capable of housing a NBA team and a NHL franchise starts at $500 million, and that’s being conservative.” Kudos to Robert Sarver for publicly offering some expense figures (no revenue figures, mind you). That’s more than anyone has seen from the Coyotes. Any public figures associated with the Coyotes have been minimized or denied by Anthony LeBlanc, an owner and visible spokesperson for the ownership group.

The question for the Coyotes becomes can they afford to move anywhere? Sarver is not in the charity business and I suspect that the owners of Talking Stick are not either. All bets are off if the Coyotes move out of Arizona. Is there an entity out there willing to pay the Coyotes to play in a newly constructed arena? Who knows? The Coyotes will have to pay to play anywhere else in Arizona and as long as they continue to suffer losses of an undetermined amount their options are very limited. No one is offering any love to the Coyotes these days and their entire future is being driven by only one thing – money.

© Joyce Clark, 2015

FAIR  USE NOTICE

This site contains copyrighted material the use of which is in accordance with Title 17 U.S. C., Section 107. The material on this site is distributed without profit to those who have not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of environmental, political, human rights, economic, democratic, scientific and social justice issues, etc. We believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in Section 107 of the US Copyright Law and who have expressed a prior interest in receiving the included information for research and educational purposes. For more information go to http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond ‘fair use,’ you must obtain permission from the copyright owner.